LONDON--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Rembrandt Insurance Company, Ltd. (Rembrandt) (Bermuda). The outlook of these Credit Ratings (ratings) remains stable.
Rembrandt is a captive (re)insurer of Vitol Holding B.V. (Vitol), a holding company of a group engaged principally in trading petroleum-related products and commodities.
The ratings reflect Rembrandt’s track record of very strong financial performance and excellent risk-adjusted capitalisation, as well as its importance to the Vitol group as a risk management tool.
Rembrandt consistently generates strong operating results, as demonstrated by a five-year average return on capital of 14% (2012-2016). Its strong financial performance is driven by excellent underwriting results, with an average five-year combined ratio of 11% (2012-2016), and is supported by good investment returns.
The company’s risk-adjusted capitalisation remains excellent, supported by low net underwriting leverage and an outward reinsurance programme that is placed with a panel of financially strong reinsurers. A marginally offsetting rating factor is the captive’s concentrated asset base, with a loan facility provided by Rembrandt to the Vitol group, representing 59% of total assets at year-end 2016 (2015: 75%). The investment risk associated with this loan is mitigated somewhat by terms that allow it to be redeemed at short notice.
A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
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